YOUR DIRECTORS ARE PLEASED TO PRESENT THE MANAGEMENT DISCUSSION AND ANALYSIS REPORT FOR
THE YEAR ENDED 31stMARCH, 2023.
The Management Discussion and Analysis have been included in consonance with the Code
of Corporate Governance as approved by the Securities and Exchange Board of India (SEBI).
Investors are cautioned that these discussions contain certain forward-looking statements
that involve risk and uncertainties including those risks which are inherent in the
Companys growth and strategy. The company undertakes no obligation to publicly update or
revise any of the opinions or forward-looking statements expressed in this report
consequent to new information or developments, events or otherwise.
The management of the company is presenting herein the overview, opportunities and
threats, initiatives by the Company and overall strategy of the company and its outlook
for the future. This outlook is based on managements own assessment and it may vary due
to future economic and other future developments in the country.
The operational performance and future outlook of the business has been reviewed by the
management based on current resources and future development of the Company.
INDIAN ECONOMIC OUTLOOK
Indian Economy had witnesses lowest GDP growth rates in its history in past 2 years
due to impact of COVID-19. While FY 21-22 indicated a "W" shaped recovery, by FY
22-23 the recovery from pandemic was more of K shape with certain sectors registering
healthy recoveries whiles certain sectors showing high negative impact. Travel &
hospitality have benefitted of the recovery.
The First Advance estimates of National Income released by NSO of Gol in Jan23
estimates Indias GDP to have grown by 7.0% in FY 22-23 following a growth of 8.7% in
FY21-22. Though globally there are talks of recession, Indian economy has shown resilience
and the consensus of expected GDP growth after factoring for domestic inflation, global
slowdown & geopolitical situation, is between 6 -6.5% in current fiscal 23-24. Indian
economy is now the fastest growing major economy in the world. The focus is now on
hygiene, environment friendly & sustainable hospitality services. Personalised and
customisable experiences will be the new normal.
The outlook for FY 23-24 is optimistic. Retail inflation is ebbing, Indian Rupee is
stable, Current Account Deficit is moderate, direct and indirect tax collections are
robust, bank balance sheets are strong, credit off take in FY22-23 was highest since
FY-11-12 and consumer sentiment is high ( Source RBI - Monetary Policy April23, Revised
estimates, Ministry of Finance) .
INDUSTRY OUTLOOK
Global tourism is steadily improving towards pre-pandemic levels. Tourist arrivals
internationally for calendar year 2022 were 9817 million, double that of 2021 &
touching 63% of pre-pandemic levels of 2019. The UNWTO expects International tourism to
consolidate its recovery in 2023, more specifically in Asia & Pacific region. UNWTO
expects international tourist arrivals to reach 80% to 95% of pre-pandemic levels in 2023.
(Source- UNWTO Barometer, January2023). As per a report by Skift India Occupancy in
Indian hotels is expected to improve to 66 percent in 2023, according to
hospitality research firm HVS Anarocks latest report. Indias hospitality sector
ended 2022 with occupancy in the 59-61 percent range, up 15-17 percentage points
from the previous year, the report said. Average room rates recovered fully in
2022, crossing 2021 levels by 37-39 percent and revenue per available room in
2022 increased by 89-91 percent over the previous year.
As per Howarth HTLs India Hotel Market Review, 2022, calendar year occupancy for 2022
was 59.8% as compared to 43.5% in 2021. The average daily rate (ADR) for 2022 was Rs.6103
& revenue per available room (RevPAR) was Rs.3648 as against Rs.4429 & Rs.1924
respectively in 2021. Mumbai registered highest RevPAR & occupancy at Rs.7532 &
78% respectively. (Source STR). In India, Tax collections have reached a new high, macro-
economic parameters are good, digital transactions have scaled new peak, there is robust
growth in domestic airline traffic, Industry has learned to work with volatility &
leaner cost structures and GenX & milleniels are showing an increasing fondness for
travelling and exploring newer destinations. There is also a rising trend for destination
weddings & celebrations & the traditional domestic travel demand and domestic
tourism has shown robust growth in recent times. These trends augur well for the Indian
Hospitality industry. Additionally, Indias G20 presidency & opportunity to host
international summits at varied locations, ICC Mens world cup cricket, growth in services
sector, higher disposable income in hands of young entrepreneurs due to increasing
investments in Start-up sector , referred to in HSBCs economic research paper is expected
to increase demand for corporate travel & holidays.
As COVID-19 and Omicron takes a back seat, Russia - Ukraine war, disturbances in
neighboring countries, rising oil & gas prices, threat of global slowdown have taken a
centre stage & threaten global economic growth which can have some impact of Indias
growth prospects as well.
OPPORTUNITIES & THREATS
Social Events, Weddings, MICE Events and Business Travel are the Four KEY components of
business. Work from Home is the new normal & combining business with vacation is the
new trend. With the new found passion for travelling and spending, we see good opportunity
for growth in the business. Indian Traveller is the new attractive segment for Indian
market.
Travel restrictions, competition from new entrants, resurgence of COVID like pandemic,
inflation, rising airline fares, unforeseen events, seasonality & cyclical nature of
the business, war, global slowdown etc. are some of the key factors that pose a threat to
the business growth.
MITIGATION
We are constantly working on excelling the customer delight and expanding our reach
through our quality of service, our amenities, our food, affordability of our offerings
and value-addition. Targeting non-traditional demand , bringing in operational
efficiencies, rationalising costs across major expense heads, bringing down material
procurement costs, improving occupancy levels and ARR, have been some of the prominent
measures taken by the Company in order to mitigate the threats. We undertake continual
repairs & maintenance to the assets to provide excellent hospitality experiences. We
also have a continual risk management framework to ensure competitive advantages, business
continuity & minimise adverse impact on business objectives
INTERNAL CONTROL SYSTEMS & ITS ADEQUACY
We have well established policies & procedures for internal control of operations
and activities that ensures that all the assets are protected against loss from
unauthorized use or disposition and all transactions are recorded and reported in
conformity with Generally Accepted Accounting Principles. Entire work force is integrated
to work in unison to achieve laid down service and efficiency standards. We have an
internal control system with checks and balance pertaining to key operations that ensures
maximum compliance to norms and regulations required by the regulatory authorities across
various aspects of the business and also supports continuous monitoring & corrective
actions to be taken. The Audit Committee periodically reviews the audit findings &
recommends corrective action to the Board as and when required.
BUSINESS OVERVIEW
The Company operates out its single stand alone property located at Chembur, Mumbai.
The Companys hospitality offerings are marked by its service and exclusive vegetarian
food at its restaurants and banquets which finds strong endorsement from its
customers. Strong understanding of its customers expectations has helped a fast
turnaround and recover from the COVID-19 impact. The Company has continued to adhere to
specific Health and Hygiene mandates of the local government and authorities and
rationalised its operations accordingly. The Company has continued to follow its growth
targets in line with asset light expansion strategy.
FINANCIAL PERFORMANCE
For the FY 22-23, Revenues from operations were Rs.1488.59 lakhs, higher by 70.75 %
over FY 21-22 and EBITDA for FY 22-23 was Rs.580.11 lakhs as compared to Rs.216.68 lakhs
for FY 21-22. The Company registered good growth in business as economies opened up,
travel restrictions were removed and pent up demand for travel and celebrations got
released. The Company has improved its operational efficiency
SEGMENT WISE PERFORMANCE
The Company operates in a single business segment and hence no separate segment wise
performance is required to be given.
OUTLOOK & STRATEGY
There has been a marked improvement in consumer confidence to travel due to effective
vaccination, low fatality rate of Omicron variant & better healthcare preparedness,
which is reflected in industry achieving pre-COVID level of occupancies. Due to massive
development of infrastructure facilities and better and faster connectivity options,
domestic travel has gained momentum & International travel should soon follow suit.
Corporate business travel is likely to increase substantially for purposes of client
acquisitions, conferences, exhibitions, tradeshows and relationship building. Further
demand for weddings and other social celebration is also rising. Due to these factors,
demand forecast is expected to be robust. Further due to favourable demand - supply ratio
the average rates are firming up. Due to these factors demand forecast is expected to be
robust and augurs well for future growth of the Company
The Company is focussed on building on its strength and capabilities to net newer
opportunities of growth by reaching out to newer customers with more and better
hospitality offerings across different segments of customer portfolio.
HEALTH & SAFETY
We adhere to all safety protocols and rules and regulations set by the regulatory
authorities as regards fire, building safety, sanitation, COVID-19 protocols and garbage
disposal. We are committed to providing a safe and conducive work environment to our
people. Designing and implementation of Health & Safety protocols is one of the
important items on agenda across all our decision making processes.
FOOD SAFETY, HYGIENE AND CLEANLINESS
The Company is constantly monitoring adherence to FSSAI guidelines and standards. We
conduct periodic trainings for our staff to apprise them of the importance of following
the standards. We also make use of newer technologies and processes for water recycling,
waste management and garbage disposal.
HUMAN RESOURCES
The Company believes that our people are our greatest asset. Our loyal and skilled
staffs enable us to withstand the challenges and grow in a highly competitive and dynamic
industry. We strive to develop teams that are fully involved in their work and empower
them to achieve new milestones in customer satisfaction and experience. They are
constantly guided by the Companys philosophy of "A Service Approach To Growth".
We recognise the criticality of human resource and ensure a conducive work environment
that helps learning and growth of individuals that in turn will enable achieving the
Organisational Objectives.
CAUTIONARY STATEMENT
Information in the management Discussion and Analysis describing the Companys
projection, estimates, expectations or predictions, may be "forward looking
statements" within the meaning of applicable securities laws and regulations. Actual
results could differ significantly from those expressed or implied in the statement.
Important factors that would make a difference to the Companys operations include
slowdown in Indias economic growth, inflation, war, change in Government Regulations, tax
laws and other factors such as litigations and labour relations.
| For and on behalf of the Board Emerald Leisures Limited |
|
| SD/- |
Sd/- |
| Rajesh Motilal Loya |
Nikhil Vinod Mehta |
| Director |
Director |
| DIN: 00252470 |
DIN - 00252482 |
+91-9892691696
